Why the Red Sox benefit if draft pick compensation is eliminated
Rob Manfred addressed the media on Thursday regarding Major League Baseball’s ongoing lockout. As the Commissioner stumbled his way through projecting optimism while simultaneously deflecting blame, he also revealed some items we can expect to be included in MLB’s next proposal for negotiations on a new collective bargaining agreement. While this comes with the caveat that nothing is official yet, the potential for these changes should pique the interest of Boston Red Sox fans.
Among the biggest takeaways from this press conference, Manfred stated that the league has agreed both to the implementation of a universal designated hitter and the elimination of draft-pick compensation for free agents who reject qualifying offers.
The universal DH is great for baseball, regardless of what some old-school traditionalists believe. Players have been clamoring for this change for years. Nobody needs to watch a pitcher flail away at the plate and it’s about time both leagues played by the same rules. No longer will the Red Sox need to bench one of their best bats when the visit a National League park. There is some downside for Boston, with increased competition to retain their current DH when he hits free agency, but the concern is outweighed by the benefits.
The elimination of draft-pick compensation could have even greater ramifications that sway in favor of large market teams, including the Red Sox. Chief Baseball Officer Chaim Bloom has aimed to balance his efforts of improving the major league roster to remain competitive in the present with building the farm system for the future. Those goals can come into conflict with one another when signing a top free-agent to help win now costs the club a draft pick.
Under the previous CBA that expired in December, teams would forfeit their second-highest draft pick in the following MLB draft and $500,000 in international signing bonus pool money if they signed a player who declined a qualifying offer. Boston should be more willing to sign big-name free agents if they are no longer attached to these penalties.
The Red sox have been hesitant to exceed the luxury tax threshold in recent years and it wasn’t simply to protect John Henry’s wallet. Teams that exceeded the tax were charged their second-highest and fifth-highest draft picks plus $1 million in international signing bonus pool money if they signed a free agent who declined a qualifying offer.
While they still need to proceed with some caution in regards to the financial ramifications, Boston should be more willing to dip into the tax if they aren’t being penalized draft picks or losing money they can spend on international singings.
According to Tim Dierkes of MLB Trade Rumors, teams will still be compensated for losing their best players to free agency, it just won’t come at the expense of the player’s new team. The proposal calls for teams to receive draft picks for losing free agents, the value of which is determined by the quality of the player.
While this obviously benefits star free agents who would no longer have their markets hindered by being attached to a qualifying offer, the MLBPA may have some concerns about how to determine the player’s value in regards to what type of draft pick compensation they are worth. This could potentially lead to small-market clubs having less incentive to re-sign some of their own players if it results in more picks to draft cheaper talent. That means more veteran talent flooding the free-agent market for teams like the Red Sox to bid on.
If draft pick compensation is eliminated completely, many clubs with concerns about if they can afford their star players will be more willing to trade them before they hit free agency. The Red Sox, with their financial flexibility and improving farm system, would be poised to strike at those opportunities.
Any changes in the new CBA that alter or eliminate draft pick penalties for signing free agents is unlikely to become a significant hurdle for the Red Sox and has the potential to pave the way to spending more in free agency with fewer restrictions in their way.